Touchless and cashless transactions provide convenience and save time. Such transactions may use, for example, RFID (Radio-frequency identification) tags (e.g. in credit or debit cards). RFID tags allow for a “tap and go” style of payment because the information is transmitted wirelessly. Two-way radio transmitter-receivers called readers send a signal to the tag and read its response. In such a transaction the user is not required to sign a piece of paper or to enter the PIN number, and neither there is any verification of signature.
Radio-frequency identification (RFID) is the wireless non-contact use of radio-frequency electromagnetic fields to transfer data, for the purposes of automatically identifying and tracking tags attached to objects. The tags contain electronically stored information. Some RFID tags are powered by and read at short ranges (a few meters) via electromagnetic induction. Others types of RFID tags may use a local power source such as a battery, or else have no battery but collect energy from the interrogating electromagnetic field, and then act as a passive transponder to emit microwaves or UHF (ultra high frequency) radio waves. Unlike a bar code, the RFID tag does not necessarily need to be within line of sight of the reader, and may be embedded in an object.
RFID tags can be passive or active or battery-assisted passive. A passive tag is cheaper and smaller because it has no battery. An active tag has an on-board battery and periodically transmits its ID signal. A battery-assisted passive (BAP) tag has a small battery on board and is activated when in the presence of an RFID reader.
Tags may either be read-only, having a factory-assigned serial number that is used as a key into a database, or may be read/write, where object-specific data can be written into the tag by the system. Field programmable tags may be write-once, read-multiple; “blank” tags may be written with an electronic product code by the user.
Generally fixed RFID readers are set up to create a specific interrogation zone which can be tightly controlled. This allows a highly defined reading area for when tags go in and out of the interrogation zone. Mobile RFID readers may be hand-held or mounted on carts or vehicles.
Prior art “tap and go” style of payment systems designed to save time and make shopping easier have some inherent issues. For example RFIDs are prone to wireless identity theft, also known as contactless identity theft. Passive “skimming” of RFIDs allow card-skimming thieves to make fraudulent purchases with information read from RFID-enabled tags carried in pockets, purses or worn as wrist bands. Additionally the shoppers can be mistakenly charged when cards are accidentally scanned while still in their wallets. Furthermore that is a chance of a malicious scan where the fraudster taps another person's RFID tag to a terminal (reader) to pay.
This technology is also facing a high rate of chargebacks which are occurring as a result of friendly fraud. In such cases the transaction is authorized by the consumer but the consumer later attempts to fraudulently reverse the charges.
A dispute is a situation in which a customer questions the validity of a transaction that was registered to his/her account. Disputes can be genuine or fraudulent. In some cases customers knowingly launch a dispute with a financial institution e.g. a credit card company after having purchased an item willingly but later declaring that it was not them. Such fraud is aimed at obtaining goods without paying, or to obtain unauthorized funds from an account. A consumer may initiate a chargeback by contacting their issuing bank, and filing a substantiated complaint regarding one or more debit items on their statement.
In case of tap and go payments a customer may initiate a fraudulent dispute as the customer can claim that the scan was accidental, and they never intended the purchase or ever received the vended products or services. A merchant may fight a chargeback for transactions where the original invoice was signed by the consumer. But in case of tap and go payments there are neither signatures nor a PIN.
RFID technology is also currently used for access control (smart badges, etc.), for example, at events, concerts, tradeshows, conferences, exhibitions, etc. However, the technology has not been combined with payment RFID to enable participants to avoid dealing with multiple payment cards, cash, etc., in addition to such smart badges. There is also the risk of loss or theft when participants have to carry multiple valuable items in what are often crowded and bustling environments.
It would be desirable to provide a wearable RFID device for making various types of transactions in an event-based interrogation zone.